Price war triggered by airline companies
DSIJ Intelligence / 18 May 2016
Airlines companies usually offer discounts during the June to September period. One may question 'How on earth are these companies managing to provide such sizeable discounts when the crude oil prices are firming up consistently'?
Even as June month is approaching, traditionally a month which sees less travellers , airline companies have started attracting travellers by doling out lucrative discounts on ticket prices. Spice Jet's offer of Rs. 511 triggered Indigo Airlines to slash its rates and is now offering tickets (all inclusive) at Rs. 806 on specific domestic routes. Spice Jet's offer will ask the traveller to pay additional taxes over the base price of Rs. 511 for the ticket.
Indigo Airlines has launched the new pricing within hours of Spice Jet's offer of Rs. 511. Indigo is aggressively offering tickets at slashed rates on various routes including Delhi-Mumbai, Delhi-Kolkata and Delhi-Bengaluru. At Rs. 806 one can now fly from Srinagar to Chandigarh and Srinagar to Jammu.
Air Vistara, a new entrant in the airline arena in India has varied offers for travellers choosing to fly by Air Vistara. There are discounts on room rents at recognised places , hefty discounts on any spa service at recognised outlets and many more offers that might interest travellers. Special discounts will be made available at participating outlets for those travellers who can produce the Vistara boarding pass within 1 week of travel.
Airlines companies usually offer discounts during the June to September period. One may question 'How on earth are these companies managing to provide such sizeable discounts when the crude oil prices are firming up consistently'?
Crude oil price is inching up and has risen by almost 80 percent from its recent lows in January this year, when it touched sub $27 levels. Now trading at $49 levels, crude oil is at its 6 month high. Crude oil is firming up since past few weeks due to supply disruption on account of sabotage,maintenance,wildfire,strikes and rebel attacks.
Interglobe Aviation (Indigo Airlines) is down by almost 2.66 percent on Wednesday at Rs.1022 per share.Interestingly Spice Jet closed in the green at Rs. 83.90 per share, up by almost 3.20 percent. JET Airways closed down by almost 1.0 percent at Rs. 648 per share.
BSE Sensex closed down by 69 points at 25,704.
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